Cost of Capital

Cost of Capital
The bond risk premium is added in to bond yield to calculate
cost of American option
cost of European option
cost of common stock
cost of preferred stock
Author: rikazzz Comment
Cost of Capital
In weighted average capital, the capital structure weights estimation does not rely on the value of
investors equity
market value of equity
book value of equity
stock equity
Author: rikazzz Comment
Cost of Capital
The bond risk premium is 3% and the bond yield is 10.2% then the cost of common stock will be
0.034
0.132
0.072
0.306
Author: rikazzz Comment
Cost of Capital
For each component of capital, a required rate of return is considered as
component cost
evaluating cost
asset cost
asset depreciation value
Author: rikazzz Comment
Cost of Capital
The variability for the expected returns for projects is classified as
expected risk
stand-alone risk
variable risk
returning risk
Author: rikazzz Comment
Cost of Capital
The capital budgeting decisions are analyzed with the help of weighted average and for this purpose
component cost is used
common stock value is used
cost of capital is used
asset valuation is used
Author: rikazzz Comment
Cost of Capital
In retention growth model, the payout ratio is subtracted from one to calculate
present value ratio
future value ratio
retention ratio
growth ratio
Author: rikazzz Comment
Cost of Capital
If the future return on common stock is 14% and the rate on T-bonds is 5% then the current market risk premium will be
0.19
0.09
9
19
Author: rikazzz Comment
Cost of Capital
The risk free rate is subtracted from expected market return is considered as
country risk
diversifiable risk
equity risk premium
market risk premium
Author: rikazzz Comment
Cost of Capital
In weighted average cost of capital, a company can affect its capital cost through
policy of capital structure
policy of dividends
policy of investment
all of the above
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